LEAP Corridor Study for Mexico

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LEAP Corridor Study for Mexico EconomicEconomic ImpactImpact AssessmentAssessment ExecutiveExecutive SummarySummary January, 2007 ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. TheThe OwenOwen´´ss DreamDream Albert K. Owen, a young civil engineer, was assigned to contribute in the technical studies for the construction of a railroad that would run from El Paso, Texas, to Mexico City. In 1872, when Owen saw the Topolobampo Bay in Sinaloa exclaimed that “IN THE FUTURE TOPOLOBAMPO WOULD UNITE ALL THE FERROUS AND MARITIME ZONES OF NORTH AMERICA, OF AUSTRALIA AND ASIA” He conceived the idea of a railroad that would run from Kansas City, would clear Missouri and Texas, would cross the “Sierra Madre Occidental” until arrive to Topolobampo, shortening 600 miles the distance of a gigantic agricultural market of the United States and opening the door, the most direct, toward the countries of Oceania and Asia. ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. MacroeconomicMacroeconomic Opportunity:Opportunity: SaturationSaturation ofof LosLos AngelesAngeles andand LongLong BeachBeach PortsPorts • 90% of traffic arrives from Asia. •14 million containers per year. •171 million tons in container. •$250,000 million dollars. •28% of the movement of all the ports of the United States. •Fifth Harbor Complex of the World. 16,000,000 14,000,000 •10% Average Annual Growth. 12,000,000 10,000,000 8,000,000 LONG BEACH LOS ANGELES 6,000,000 Sources: Web pages of the ports: 4,000,000 www.polb.com 2,000,000 www.portoflosangeles.org 0 2001 2002 2003 2004 2005 ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. TheThe saturationsaturation ofof thethe portsports ofof thethe PacificPacific CoastCoast inin USAUSA representrepresent anan opportunityopportunity forfor Mexico.Mexico. Delays from 6 to 21 days… no improvements expected. It is estimated for 2010 the oversaturation of the ports of Los Angeles and Long Beach. Source: Poder y Negocios, January 17, 2006 ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. InterestInterest ofof AsiansAsians inin MexicanMexican portsports “China and Japan are interested in developing Mexican ports to avoid delays in Long Beach and Los Angeles”… Poder y Negocios January 17, 2006 March 7, 2005 ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. CongestionCongestion ofof TheThe PanamaPanama CanalCanal 12,500 ships in 2005 300 million tons CP/SUAB1 Capacity of 330-340 million tons CP/SUAB1 In the 2005 operated at 85% of its capacity The PCA2 estimates that it will reach 100% of its capacity between 2009 and 2011. Investment project of 5.2 billion dollars in 8 years. Source: www.pancanal.com 1. CP/SUAB signifies Universal System of Capacity of Ships of the Panama Canal, that is the unit of measure in tons of load that travel for the Panama Canal. The ton CP/SUAB serves of unit to determine the tolls and measures the volumetric capacity of load (instead of be a measure in base to the weight). A unit CP/SUAB equals approximately to 100 cubic feet of space of load. 2. Panama Canal Authority (PCA) ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. ¿WhoWho isis alreadyalready takingtaking advantageadvantage ofof thisthis opportunityopportunity? Manzanillo, Col. (with exit by Nuevo Laredo)1 – More than 800 thousand containers by year in 2005 – Investments of Hutchinson Ports Lázaro Cárdenas, Mich. (with exit by Nuevo Laredo)1 – New Installations for the reception of containers (2005) – 200,000 containers in the first year – 2 million containers in 10 years – Investment of Hutchinson Ports Ensenada, BCN. (project)1 – Investment of Hutchinson estimated in 2 billion dollars. – Capacity for 6 million containers by year in the medium term. Corridor from the Gulf to the Pacific2 Sources: •1. Research in the web pages of the ports and – Competition to the Panama Canal www.jornada.unam.mx/2005/03/07/secara.html – Connects Coatzacoalcos to Salina Cruz •2. Article published in www.elnorte.com – Corridor of 302 Km. – $1,500 million of pesos in 12 years – 550 thousand containers annually – Investment: Ferrosur, Hutchinson ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. OpportunityOpportunity forfor ““LaLa EntradaEntrada alal PacPacííficofico”” Corridor:Corridor: ReceiveReceive merchandisemerchandise fromfrom AsiaAsia withwith destinydestiny toto thethe easteast ofof thethe UnitedUnited StatesStates ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. Dallas / Fort Worth: The greater center of distribution and logistics of North America $49.6 thousand millions of dollars in international trade. 26% of the trade is with China. 68% of the trade is with Asian countries. 70% that arrives to Long Beach and Los Angeles is sent to Dallas/Ft. Worth. DFW COMERCIO INTERNACIONAL TOTAL 2001-2005 DFW COMERCIO INTERNACIONAL $49,601 2005 50000 $43,979 Otros China 25% 45000 28% 40000 $36,196 S E $30,520 35000 $29,758 LAR Tailandia DO 30000 3% E D Reino Unido ES 25000 3% Korea del Sur N O Filipinas 10% 20000 3% MILL Alemania Japon 3% 15000 Malasia Singapur 7% Taiwan 6% 6% 10000 6% 5000 Source: 0 Greater Dallas Chamber 2001 2002 2003 2004 2005 Fuente: USA Trade Online ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. OpportunityOpportunity forfor MidlandMidland andand OdessaOdessa withwith thethe newnew corridorcorridor •Midland and Odessa see the corridor as an alternative for economic diversification: to pass from an economy based on the petroleum to be become a center of distribution and logistic. •Competitive Advantages and location. ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. ¿¿WhatWhat areare ourour AdvantagesAdvantages?? ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. CompetitiveCompetitive AdvantagesAdvantages •Lower distance in 300 miles (Topolobampo- Dallas Vs. Long Beach- Dallas). •Topolobampo Port: with development potential Ferromex-Texas Pacífico & Connections •Frontier port strategically Area of Influence and Potential Market located and with potential for development. •Railway from Topolobampo to Ojinaga. TEXAS-PACIFICO TRANSPORTATION FORT WORTH & WESTERN RAILROAD MAYAB ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. EconomicEconomic andand SocialSocial ImpactImpact ofof thethe CorridorCorridor ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. 1.1. SocialSocial ImpactImpact ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. TheThe newnew roadroad willwill havehave anan enormousenormous socialsocial impactimpact •Improve the quality of life of marginalized regions of the state. •Connection with the rest of the state. •Reduction on the price of products. •Economic development and social Impact in the municipalities of Urique and Guazapares, mainly. ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. The municipalities of the “sierra” zone (mountains) have one the lowest welfare levels in the state and in the country Level Optimum level Extreme Poverty TEMOSACHI GUERRERO MORIS OCAMPO URUACHI MAGUARICHICARICHI BOCOYNA CHINIPAS NONOAVA GUAZAPAREZ URIQU GUACHOCH E I BATOPILAS BALLEZA MORELO S GUADALUPE Y CALVO Population of 296,000 inhabitants ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. 2.2. EconomicEconomic ImpactImpact inin thethe ““sierrasierra”” zonezone Mining and Tourism ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. ImpactImpact inin thethe miningmining sector.sector. Development of currently operations and new investments, access to suppliers of Chihuahua Monterde Palmarejo Piedras Verdes El Sauzal ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. ImpactImpact onon TourismTourism It will detonate new touristic projects from the “Barrancas del Cobre “ Project. Synergy with the State of Sinaloa Development of tourism from Chihuahua toward the coast of the Pacifico New alternative of entrance to Chihuahua of tourists from Sinaloa by highway and from tourism cruisers. The highway will permit the development of new potential tourist areas that lack an access by adequate ways ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. 3.3. ImpactImpact inin thethe EconomicEconomic DevelopmentDevelopment ofof thethe EntityEntity Industrial Development, trade, services in the zone central south of the State. Development of the port Ojinaga- Presidio. ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. ImpactImpact inin thethe regionalregional economyeconomy Attraction of new investments projects: – Industrial – Transportation and Logistic – Complementary services for transportation – Trade and services – Generation of Jobs ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. The corridor “La Entrada al Pacífico” presents a high impact in the central-south zone of the state: Industrial sector for export. •Ojinaga-Presidio as an exit port of the industry from the central-south zone of the state to the USA market. •Potential to receive industrial investments from Asia that at present are locating in Baja California. ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. 4.4. InterInter--statestate tradetrade withwith SinaloaSinaloa Farm products, cattlebreeding, tourism, industrial goods ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. ForeseeableForeseeable impactimpact inin thethe industrialindustrial sectorsector ofof SinaloaSinaloa andand ChihuahuaChihuahua •Promotion of new industrial investments: maquiladora •Satellite operations along the corridor. •Sinaloa has a deficit in Milk. ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. 5.5. InternationalInternational tradetrade ALDERETE Y SOCIOS CONSULTORIA INDUSTRIAL, S.C. TheThe corridorcorridor willwill havehave anan impactimpact inin thethe growthgrowth ofof internationalinternational tradetrade byby thethe portport ofof OjinagaOjinaga--PresidioPresidio From 49 trucks per day to: – 550 in 2010 – 965 in
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